Paytm Mall, the e-commerce arm of Paytm, is planning to shore up its grocery business by trying to pick up stakes in two startups that boost strong presence in the grocery segment. These startups are SoftBank backed Grofers and Unilever & Innoven Capital funded Milkbasket.
According to sources privy with the matter, SoftBank (a common investor in Paytm Mall & Grofers) has initiated the negotiation between the two companies.
SoftBank, which is currently saddled by record-breaking $18 Bn loss, is unlikely to pump any fresh capital and will be more than open about encouraging consolidation between its portfolio companies.
The consolidation between Grofers and Paytm Mall appears to be a win-win situation, with Grofers desperately looking for fresh capital infusion to sustain itself in the market; the Gurugram headquartered company was also reported to be in talks with Zomato for potential acquisition.
Paytm Mall, on other hand, will benefit from Grofers’ recent good showing in the grocery segment. Capitalizing on a skyrocketing demand for essentially goods, Grofers along with BigBasket has emerged as the greatest beneficiaries during the lockdown period; that has left common people clamoring for grocery products.
Due to unprecedented demand for grocery items, Grofers and BigBasket are expected to clock $3 Bn sales this year – whopping 76% increase in sales over last year.
Separately, Paytm Mall is also reportedly pursuing talks to pick up stake in MilkBasket. According to reports, the company has been desperately seeking to raise funds or getting acquired during the last 6 months.
Paytm Mall – an embattled e-commerce platform
After Paytm Mall was spin off as a separate entity in 2016, it went full-throttle in capturing the market share by attempting to lure customers by cashback and discount offers. Backed by two bigwigs – Alibaba and SoftBank – the company burnt lot of cash, with the company at one point of time burning almost INR 200 crore every year.
However, despite all the cash guzzling exercises, Paytm Mall failed to muster even a decent challenge against Amazons and Walmarts (owns Flipkart). Holding currently a paltry market share of 3.5% as against impressive 31.9% and 30% market shares held by Flipkart and Amazon, Paytm’s e-commerce venture has proved to be a no show.
Media reports speculate that Paytm Mall’s CFO Rudra Dalmia has resigned.
The continuing trouble in Paytm Mall again resurfaced recently after reports emerge that Paytm mall’s CFO and executive director Rudra Dalmia has resigned and is currently on a notice period. Dalmia was appointed and elevated to the position of Executive Director with hope to revive the company’s business.
However, Dalmia’s resignation has not been officially confirmed by Paytm and the concerned person has himself remained silent on the matter.
Dalmia’s LinkedIn profile still shows that he is still serving as Executive Director & CFO at Paytm E-Commerce Pvt. Ltd while his Twitter bio profile has no mention about Paytm.
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